Tesla Raises Electric Vehicle Prices in the U.S. and Steadies Them in China
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Electric vehicles (EVs) are out to take over the market. More manufacturers are jumping on the EV trend, meaning that not only are more electric vehicle options available, but they’re becoming more affordable.
If you’re looking at a Tesla though, you’ll see higher prices than before. According to Reuters, Tesla has increased their prices in the United States while prices in China are unaffected.
Tesla might be a big name in the U.S., but they’re still facing stiff competition overseas. | Courtesy of Tesla, Inc.
Why Tesla prices in America are going up
Tesla is viewed as one of the brands that made electric cars popular, and because of this, they are doing very well in America.
The biggest name in electric vehicles, Tesla is known for their luxury Model S sedan and more affordable Model 3. With their increasing presence, they are seeing record profits.
However, Tesla price increases are also common at the moment. For example, their popular compact SUV, the Model Y, has had six price hikes in the United States this year. Right now in the U.S., the Model Y has a standard price of $53,990, that’s $5,500 more than at the start of the year.
Why Tesla prices in China are staying the same
Tesla is the king of the EV market in the U.S., while China has the largest EV market in the world. So in order to make a mark overseas, they have to compete with Chinese manufacturers.
Domestic Chinese electric vehicles have made a splash in the Chinese market. Names like Nio and Xpeng are the biggest brands of electric vehicles there, despite Tesla’s plant in China.
A Tesla can cost as much as three times more than a Chinese EV, so even if they have name recognition, they need something else.
Tesla has needed to keep their prices down in China to remain competitive, so they have introduced more affordable variants of their vehicles specifically for the Chinese market.
Chip shortages are to blame
For the American market, though, Tesla prices may continue to climb indefinitely. One of the main issues Tesla and other manufacturers in the U.S. face is the chip shortage.
Tesla CEO Elon Musk has pointed to the current chip shortage as one of the company’s biggest struggles right now. To keep up with vehicle production, they have had to turn to different chips, which increased production costs.
Musk is hopeful that this chip shortage will subside soon as the effects of the pandemic on the market decline.
Regardless, Americans interested in buying a Tesla may still be frustrated at the price increases, especially if they see that Chinese Tesla prices haven’t changed. Experts have pointed out that Tesla kept the prices of their vehicles down when they first came out in the U.S.
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